NZ boat builders in 'survival mode' and doing deals

by Jeni Bone on 9 Feb 2009 In New Zealand, the boating industry has expressed concern about the year to come, suffering as the global financial crisis results in a lack of liquidity hitting orders and sale values. According to Auckland- yacht broker, Blair Harkness the sale price for used yachts had fallen 30%.

Noel McKenzie, of Laurie Collins Marine was quoted in local papers saying: 'It's all very quiet. The level of enquiries are way down. We're just in survival mode.'

Superyacht company, McMullen & Wing announced that the recession has hit orders in the 120 to 140-foot category, but enquiries had increased for 100-foot yachts. Co-owner, David Porter said 2009 will be known 'as the year that deals were done'.

'Everyone wants a really good price. We're all being squeezed a bit.' Fortunately, given the state of the NZ Dollar, exports are more attractive than ever.

Smaller boat builders are also feeling the pinch. Mark Orrell, of Marac Finance said demand had 'significantly' dropped away for top-end imported yachts up to 60-foot with values between $800,000 to $3 million. There is still constant demand for mid-range boats between $200,000 and $850,000.

New Zealand Marine Industry Association (NZMIA) executive director Peter Busfield said he expected attendance to drop at the Auckland International Boat Show in March by 20% from the 20,000 attendees last year.

Busfield said the Auckland Boat Show would be a good indicator of how the sector was coping. 'We're just focusing on getting them in there to spend their money.' On the positive side, he said, the 150,000 power boats and 20,000 yachts in New Zealand all needed to be insured and to receive berthing and maintenance services.

'Over half of the industry is in the service side so we are guaranteed business from the service side to a certain level.' The industry in New Zealand was fortunate in that it could provide deep-water berths next to five-star hotels facilities that weren't available in other parts of the world, he said.

'Louis Vuitton will generate some interest in the sector as well. There are 30 superyachts booked up at the Viaduct at the moment. It's tough across the board for all vendors of luxury discretionary items.' said Busfield. 'It's crucial that over the next six to nine months there is business coming in to maintain the level of activity.'

The Institute of International Finance has said the world economy would shrink this year for the first time in nearly 50 years. That is cutting demand for luxury goods from Swiss watches to French perfume.